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Consumer Response to Versioning: How Brands' Production Methods Affect Perceptions of Unfairness

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  • Andrew D. Gershoff
  • Ran Kivetz
  • Anat Keinan

Abstract

Marketers often extend product lines by offering limited-capability models that are created by removing or degrading features in existing models. This production method, called versioning, has been lauded because of its ability to increase both consumer and firm welfare. According to rational utility models, consumers weigh benefits relative to their costs in evaluating a product. So the production method should not be relevant. Anecdotal evidence suggests otherwise. Six studies show how the production method of versioning may be perceived as unfair and unethical and lead to decreased purchase intentions for the brand. Building on prior work in fairness, the studies show that this effect is driven by violations of norms and the perceived similarity between the inferior, degraded version of a product and the full-featured model offered by the brand.

Suggested Citation

  • Andrew D. Gershoff & Ran Kivetz & Anat Keinan, 2012. "Consumer Response to Versioning: How Brands' Production Methods Affect Perceptions of Unfairness," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 39(2), pages 382-398.
  • Handle: RePEc:oup:jconrs:doi:10.1086/663777
    DOI: 10.1086/663777
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    Cited by:

    1. Katharina Dowling & Daniel Guhl & Daniel Klapper & Martin Spann & Lucas Stich & Narine Yegoryan, 2020. "Behavioral biases in marketing," Journal of the Academy of Marketing Science, Springer, vol. 48(3), pages 449-477, May.
    2. Nguyen, Bang & Klaus, Philipp “Philâ€, 2013. "Retail fairness: Exploring consumer perceptions of fairness towards retailers’ marketing tactics," Journal of Retailing and Consumer Services, Elsevier, vol. 20(3), pages 311-324.
    3. De Sordi, José Osvaldo & Meireles, Manuel & Bitencourt Jorge, Carlos Francisco & Rigato, Carlos & Oliveira, Osvaldo Luiz de, 2020. "Versioning products and services by downsizing digital components: Risks due to consumers' feelings of unfairness," Technology in Society, Elsevier, vol. 62(C).
    4. De Sordi, José Osvaldo & Nelson, Reed, Elliot & Meireles, Manuel & da Silveira, Marco Antonio, 2016. "Development of digital products and services: Proposal of a framework to analyze versioning actions," European Management Journal, Elsevier, vol. 34(5), pages 564-578.
    5. Shivendu Shivendu & Zhe (James) Zhang, 2015. "Versioning in the Software Industry: Heterogeneous Disutility from Underprovisioning of Functionality," Information Systems Research, INFORMS, vol. 26(4), pages 731-753, December.
    6. Golovacheva, E., 2016. "When consumers activate persuasion knowledge: Review of antecedents and consequences," Working Papers 6440, Graduate School of Management, St. Petersburg State University.
    7. Mittal, Divya & Agrawal, Shiv Ratan, 2016. "Price transparency reflects assurance and reliability," Journal of Retailing and Consumer Services, Elsevier, vol. 31(C), pages 43-51.
    8. Janina Garbas & Sebastian Schubach & Martin Mende & Maura L. Scott & Jan H. Schumann, 2023. "You want to sell this to me twice!? How perceptions of betrayal may undermine internal product upgrades," Journal of the Academy of Marketing Science, Springer, vol. 51(2), pages 286-309, March.
    9. Bhavya Mohan & Ryan W. Buell & Leslie K. John, 2020. "Lifting the Veil: The Benefits of Cost Transparency," Marketing Science, INFORMS, vol. 39(6), pages 1105-1121, November.
    10. Kuppelwieser, Volker G. & Klaus, Phil & Manthiou, Aikaterini & Boujena, Othman, 2019. "Consumer responses to planned obsolescence," Journal of Retailing and Consumer Services, Elsevier, vol. 47(C), pages 157-165.
    11. Lee, Young-Jin & Ghasemkhani, Hossein & Xie, Karen & Tan, Yong, 2021. "Switching decision, timing, and app performance: An empirical analysis of mobile app developers’ switching behavior between monetization strategies," Journal of Business Research, Elsevier, vol. 127(C), pages 332-345.

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